Bulawayo's community gardens boost economic activity

ZDDT’s Pumula South facilitated nutritional garden

 In a move that Bulawayo’s Ward 27’s community described as a worthy investment, ZDDT’s Pumula South facilitated nutritional garden has become primary source of vegetables for local vendors.The vendors are now openly commending the gardeners by telling this Correspondent that the garden was supporting their own enterprise.

When this garden started, people overlooked it as a flop, but here it is now, people are getting their orders from this garden.

People are encouraged to  join the garden club, as this might help many jobless people since the economy in Zimbabwe is not good and thus unepmloyment rates are high. 

About eleven vegetable vendors, operating in the vicinity of the project have been saved from travelling to City’s Main market, as they are conveniently walking to buy their fresh vegetables at this nearby allotment where the local women make up the membership.

The saving on travel, to and from the city markets each day, amounts to an average of  sixty dollars a month.

ZDDT’s Pumula South facilitated nutritional garden

http://www.zddt.org/zddt-news/570-community-garden-economic-activity 

The level of unemployment has reached alarming and unsustainable levels

people vending in front of their homes

The level of unemployment has reached alarming and unsustainable levels due to massive retrenchments, alarming levels of deindustrialization’s, exporting of jobs to South Africa and China due to high imports, high sovereign risk, institutional rigidities, low foreign direct investment which is all leading to massive despair, poverty ,idleness ,possible seething anger and a nation of nothing else except vending .

A man cares little for ideology, statements of intention, propaganda, historical imbalances and many other dummies being sold, no matter how noble, when he has no work and his family is starving.

The economic slide shows no sign of receding or ending but rather it’s on heightened deceleration. The government reassuring creed is that something is being done. Let that something be done!! That something is the hard decision points.

Zimbabwe cannot afford to be poor yet it is rich in resources’ and has innumerable other comparative advantages. The county needs to change its economic policy, operating environment and laws to attract foreign direct investments.

Large and small companies are failing and the government invokes the “too big to fail” and “national emergency” mantras and selects the winners in industry, not based on their merits but on the basis of lobby efforts, political influence and “national interest”.

This is not to say some of the goals are not practicable and laudable but there is real danger that we are yet know the economic abyss we face if we continue with this trajectory without making hard decisions.

The tools currently chosen to correct the decline are not compatible with achieving sustainable comparative advantages but rather promote investors to flee this jurisdiction and some of the investors never considering us as a choice investment destination.

I was thinking today about how much effort it takes to be rational in this irrational world. It’s a lot of effort. Rational thinking shows that reckless populist policies damages investor confidence and undermines the economy.

My rational thinking is that the government may have to backtrack on some of its major policies or we will soon have no fiscal space even to pay the revered civil servants.

The reason to backtrack is self-evident for any rational person to see, that the economy is in a downward spiral. Nothing seems to be in place to stop the haemorrhage. Maybe one’s rational is someone’s irrational but facts never lie and I chose to stick by them.

The Indigenisation and Economic Empowerment Act is a noble and laudable act but remains the biggest impediment to attracting and retaining Foreign Direct Investment (FDI).

The act is an avoidable self-inflicted constraint which must be repealed or massively amended. The imperative should be to grow the economy first rather than sharing the inherited diminished Rhodesian industry crumbs.

If the government has candid conversations with itself the truth will prevail that Zimbabwe no longer has any significant industries to “indigenise “and resultantly create new employement. The industries are now too few and almost run down such that most are not worth the effort of making a business plan to acquire the loved 51% equity.

Priority should be to seek new capital to propagate new industries then think of a properly structured indigenisation policy or act maybe 10 or so years from now when the national cake is enlarged. Further unrelenting barrage of pronouncements on the act undermines any hope of job creation, increase in tax base and export growth.

It’s impossible to create a country of 6 million entrepreneurs so the act is rather a loud sounding nothing piece of legislation to the masses.

The indigenisation law is an attempt to appease the same old Zimbabweans who have means to benefit from the government largesse. It may be painful to the policy makers to know that the 90% of the unemployed care less of the ideology of ownership more so when these owners are the same faces who benefited from the land reform.

Many have truly said that choosing not to choose is a choice in and of it. Deciding not to decide has as many consequences as the decision – but it is easier to hide behind the nonsensical “its policy” thing.

Analysis and facts show that a once self-sufficient agro based Zimbabwean economy has dismally failed to produce maize, potatoes, tomatoes, onions, wheat and many basic agro products for its citizens a decade and half after “ land reform”.

The choice we have to make is to make a hard climb-down .Humiliating as it may sound, it is the most simple and rational decision to make.

It is better to bring contract farmers and joint ventures farming partners with expertise to do part farming for us irrespective of their colour, origin, ethnic or nationality, even if they are the same expelled and loathed farmers.

The country will benefit from sufficiency, investment, job creation, and contract farming fees, taxes, export growth, imports reduction and more importantly the reincarnation of downstream industries.

The government then can concentrate its energy and resources to support vulnerable small scale and peasant farmers then leave commercial farming to experts. Commercial farming is ideally a full time business which requires dedication in time resources.

Bulawayo vendors

Entrepreneurship support can help grow Zimbabwe’s economy

All of these challenges are characteristic of the informal sector. Coupled with all of these, are government policies on increased taxes and ill-timed market liberalisation which has meant that some entrepreneurs have been forced out of business or leading to static business growth.

In recent years, all over the world, the promotion of entrepreneurship as an insurrection to solving numerous economic and social challenges facing developing countries has been receiving significant attention by, governments, policy makers and the academic fraternity.

Notwithstanding the attention that has been given, little has been done in trying to empower aspiring entrepreneurs and those in practice other than scuttlebutt street talk that has hyped on the topic. With the said magnitude of awareness there is now need to take a huge leap forward through providing support to aspiring entrepreneurs.

Entrepreneurship is the ingenious act of spotting an economic gap and marshalling the available resources in an efficient manner to move into that gap. It leads to investment and job creation. It besides being the most imminent way of solving both the social and economic woes bedevilling developing countries like Zimbabwe, a little has been done for its promotion but a lot has been done for its awareness.

A lot has been done in encouraging entrepreneurship by the Government, civic society, academic institutions and the corporate world. Why then does it seem like little change has been felt since such calls has been made for such a long time? Lest we change our approach to solving the problem, then the status quo won’t be averted.
Zimbabwe needs entrepreneurial education from a tender age supported by entrepreneurial promotion at a ripe age. By this I mean, pupils have to be taught entrepreneurship in schools and they then find the support they need to start-up as they are maturing.

An array of challenges, is affecting aspiring entrepreneurs in their savvy and zeal to establish successful enterprises that can change quite a good number of livelihoods in the country. Main constraints include negative interference in markets, such as over-regulation and bureaucracy by Government arms, especially in the process of registering a new start-up.

This kind of interference is also being exerted by larger enterprises in the form of monopolies, collusion and unfair trade practises. In such cases, the government has to intervene to maintain fair competition for the protection of start-ups and promotion of entrepreneurship.

Due to the said challenges, too many entrepreneurs are currently working in the informal sector of the economy. Few businesses are registered. Many of their businesses suffer from fluctuating production and have difficulties accessing capital and wider markets, poor infrastructure and other amenities and a lack of structured land tenure system.

The introduction of innovation and new products and services by entrepreneurs thrives in an environment where governments create the enabling atmosphere. This can be achieved through the use of institutional and policy objectives to establish the best conditions possible enabling individuals to bet on the future with the goal to creating value. Empowering people to take entrepreneurial initiatives and helping them to build formidable businesses has been one of the most effective ways of reducing poverty and putting peoples life into their own hands.

Entrepreneurship can only flourish in Zimbabwe if the government can help in removing the barriers to business start-up. The Government can also encourage start-ups through the use of an incentive-based structure of taxation and regulation that rewards initiative and calculated risk-taking. Simple rules of registration allow businesses to start up quickly and get on with the task of providing goods and services to the market thereby contributing to the GDP of the country.

The level of regulation affects whether entrepreneurs make the positive choice of entering the formal economy instead of the informal. A positive choice will ensure more revenue to the government in terms of tax inflow and the plight of the people will also be uplifted as more wealth is created and more jobs are also created.

A stronger culture needs to be promoted among those who are not entrepreneurs especially the youth are an important target group in this cause. They can be encouraged to think about business ownership as a career option and to combine it with technical skills. Promoting such a culture among youth can be effected through the education and training system.
The Government can then take part in making the environment conducive for small business that can go a long way in poverty reduction through the development of vibrant and productive small enterprises.

 

The challenges faced by small enterprises in Zimbabwe

women selling vegies

It is well known to economists and development practitioners that in any given country the majority of economic activities are carried out by small to medium enterprises (SMEs) and that the best way of fighting poverty is to capacitate small businesses. 

The SMEs include the corner vendor, the village cobbler, the growth point grocer shop, the backyard chicken producer, the cottage tailor and any other businesses that feel small. If you look at an individual vegetable vendor you could see an insignificant person but if you imagine that there are, say, a million of them in Zimbabwe and that each one of them sells an average of $2 worth of veggies a day (which gives us a whooping $2 million a day and a staggering $728 million per year) then you will begin to see that, small as they are in their individual capacities, collectively they are a special.

The first obstacle that SMEs face is that of lack of access to capital from financial institutions. The causes of that are multiple. They include (but are not limited to) the perception by financiers that financing SMEs constitute a higher risk, lack of collateral which bankers insist on having if they are to give loans to SMEs, the fact that the banks do not have departments that are adequately resourced to deal with the financial needs of SMEs who are either serviced through the retail banking staff who do not have enough skills to deal with business banking or through banks’ microfinance departments which by and large are treated as social responsibility projects by banks, absence of business track record due to the fact that most SMEs are informal businesses which sometimes do not even bank their sales revenues, perceived lack of business management skills and lack of know-how on how to raise capital from banks.

In instances where SMEs do get the loans from banks the terms (which include interest rates) are usually very stringent. Because of this lack of access to finance from deposit taking institutions SMEs end up borrowing from money lenders whose average interest rates of 30% per month are too heavy for any business’ cash flows to carry and hence put SMEs in unnecessary financial burden and distress.
Related to the foregoing obstacle are the twin evils of lack of access to credit terms from suppliers and insistency of large corporate clients on getting credit terms from small businesses. Getting credit from your suppliers is the cheapest source of finance for a business. 

http://www.herald.co.zw/editorial-comment-time-to-harness-informal-sector/

Why Zimbabwe government must get behind small businesses and informal traders

Zimbabwean economy at the moment (2015) is being driven by the small businesses and informal traders. With Zimbabwe’s unemployment rate at around 80% and literacy rate being the highest in Africa at 90%, it is unimaginable the number of learned people on the streets.

All these educated people who have not found employment have employed themselves by starting business ventures whether formal and informal. They are actually making a living from those ventures.

One thing to reckon is Zimbabwe is busy at work. After the depression-hyperinflation era, most people acquired entrepreneurial skills. These are skills that came out of necessity but are really important and invaluable life skills.Most people are harnessing these skills to further their financial lives in the wake of lack of jobs.

Though the government has made some efforts to support enterprenuers and small businesses in Zimbabwe, the effort is not enough.

Much of the resources are channelled to established companies and less goes to small businesses but small business and start-ups is the way to get growth in the economy and to create more jobs. This needs to be backed by more bank lending and start-up loans for entrepreneurs.

Richard Branson notes that sustainable growth in the economy will come from private sector investing to create jobs. To get the growth from the private sector, he says, there is need to get behind the small and medium-sized businesses that are the engines of any healthy economy. To do this they need investment and finance and that comes from the big banks. The politicians talk of encouraging lending. He asserts the need for action to match that rhetoric. Government needs to focus on smaller businesses and find ways of making it easier to set up a business in the Zimbabwe. It should look at reducing business rates and regulation on small and start-up companies.

There is also need to encourage more entrepreneurship from the next generation – and focus on giving them the basic business and money management skills as part of the schools curriculum.

http://entrepreneurcrunch.com/becoming-an-entrepreneur/
.zimeye.com/zimra-to-tax-raid-small-businesses/

Ideas for Starting a Business in a Small Town

Starting a business in a small town presents its own set of challenges. There is less competition, but there are also fewer potential customers, and people in small towns may have less money to spend on luxuries. You may also need to avoid competing against businesses that are already well-established and popular. On the other hand, many small towns lack a wide variety of businesses, and people may be craving something new.

 Local Businesses

One idea for a small-town business is to make or produce something that is uniquely local, such as photos of the local area or food products produced locally. You can also sell handmade jewelry or clothes that are either customized to represent some feature of the local area or made locally. You could target tourists or people who live in the town part-time, or sell your products on the Internet as a "taste of the town". You can also provide a local service, such as running a children's camp for the local community that incorporates the local geography and heritage in its activities.
Local Knowledge

Some types of business trade on local knowledge. For example, if your town is in a popular tourist area, you could make guides to the area or act as a tour guide. If the town makes a unique type of product, such as jewelry or a speciality food product, you could sell these on the Internet or in larger towns. You can also buy products that are hard to find locally and sell them. Another idea would be to renovate a derelict building and develop it as an artistic or community center or a conference center.

Related Reading: Tax Benefits of Starting a Small Business

Serve Existing Businesses

Many small towns lack a source of business know-how. You could target existing businesses by providing services and skills that are harder to come by or that are in demand in small towns. For example, you could run a business providing virtual assistants, accountants, web design or business coaching to existing businesses. With the wealth of government contracts available to businesses in rural areas, you could help other businesses to find and apply for these contracts.
Supply What's Missing

In many small towns, there are few places for people to spend leisure time. A business that combines two or more leisure activities may be welcome. For example, you could open a movie theater with a bar or coffee shop in it or a shop that boasts space for holding art classes. Or, your business could take advantage of popular local activities by catering to bird watching, hiking or biking enthusiasts and provide supplies and instruction.

http://entrepreneurcrunch.com/category/entrepreneur-success-stories/
http://entrepreneurcrunch.com/2015-hot-business-ideas-zimbabwe/

Pirate taxis are cheating the government

Pirate taxis, are cheating government as they are making money without paying any cent as tax. Most of these kombis haven not paid tax because of poor business caused by pirate taxis. The  pirate taxi owners are making more money than the kombis as they have a profit of about $40 per day after fuel expenses while kombis were making $15. They do not pay anything to government but kombi             operators which make $15-$20 are required to pay tax.Registered commuter omnibus operators have been complaining of the hundreds of private cars operating illegally, mostly in low density suburbs, especially Sunninghill as well as in some high density areas such as Luveve and Pumula  and want the policy implemented soon.The pirate taxis are “causing havoc” in the city’s public transport system.Those private cars  even put fake registration number plates and cause all sorts of problems, even for the police, as you saw what happened when a police officer was dragged by a private car and later died.  They don’t pay taxes but steal our business as registered commuter omnibus operators but we are still expected to pay presumptive tax and other dues to government.

Pirate taxis in Bulawayo

http://nehandaradio.com/2014/12/08/pirate-taxis-vex-kombi-operators-bulawayo/
http://www.chronicle.co.zw/pirate-taxis-give-police-hard-time/ 

Small to Medium Enterpises Willing to Pay Tax

Small to Medium Enterprises and Co-operative Development Minister Sithembiso Nyoni  said small enterprises are willing to pay tax to the Zimbabwe Revenue Authority like other businesses.The SMEs want to pay tax like other Zimbabweans. They are ready and willing to pay tax. All they want is to be treated like businesspeople. Informal sector is business, and the business must pay its obligation and abide by the law. In January Zimra announced that it will start taxing SMEs to widen the revenue base.Sanctions-induced economic hardships have seen firms closing and most unemployed people turning to the informal sector for survival.

 
http://www.thezimbabwedaily.com/zimbabwe/22721-give-smeinformal-sector-its-due-space.html

Six Small to Medium Enterprises to exhibit under ZimTrade at ZITF

SIX small to medium enterprises will participate at the 56th edition of the Zimbabwe International Trade Fair under the ZimTrade banner as the organisation continues to nurture the sector into viable export entities. ZimTrade chief executive officer Ms Sithembile Pilime said the SMEs, drawn from the clothing, leather, furniture and engineering sectors, were producing quality products that could compete in the local and export markets.These SMEs are drawn from those companies that have demonstrated potential to export and/or are graduates of our Export marketing Training Programme now reviewed and rebranded to Marketing and Branding for International Competitiveness (MBIC).

ZimTrade would also capitalise on the exhibition to disseminate information on its product and service portfolios which would include free demonstrations on how companies could benefit from the upgraded ZimTrade’s Trade Information Centre. Speaking on what the organisation was doing to assist SMEs, Ms Pilime said they had been carrying out export awareness seminars meant to capacitate SMEs with requisite market and product specific intelligence to penetrate export markets.

Six companies participated under the ZimTrade banner last year and these were drawn from the clothing, footwear, arts and crafts and engineering sectors.

Meanwhile, at least 40 local business representatives are expected to attend ZimTrade’s Executive Development Programme on International Trade in Bulawayo tomorrow.

 

The importance of small businesses in the local economy.

While small businesses may not generate as much money as large corporations, they are a critical component of and major contributor to the strength of local economies. Small businesses present new employment opportunities.Small businesses contribute to local economies by bringing growth and innovation to the community in which the business is established.

 Small businesses also help stimulate economic growth by providing employment opportunities to people who may not be employable by larger corporations. Small businesses tend to attract talent who invent new products or implement new solutions for existing ideas. Larger businesses also often benefit from small businesses within the same local community, as many large corporations depend on small businesses for the completion of various business functions through outsourcing.

Many small businesses also possess the ability to respond and adapt quickly to changing economic climates. This is due to the fact that small businesses are often very customer-oriented. Many local customers will remain loyal to their favorite small businesses in the midst of an economic crisis. This loyalty means that small businesses are often able to stay afloat during tough times, which can further strengthen local economies. Small businesses also accumulate less revenue than larger corporations, meaning they may have less to lose in times of economic crisis.

Flower sellers in Bulawayo